Distinct Business Entity

DEFINITION of 'Distinct Business Entity'

A sub-division within a company that is completely autonomous from the rest of the company. The distinct business entity will have complete control over how it utilizes its assets, organizes its management and the most appropriate financing structure if required.

BREAKING DOWN 'Distinct Business Entity'

A distinct business entity will most likely be segregated from the rest of the company based on some operational distinction, such as having a separate product line, being geographically segregated or by offering a different service then the rest of the company.

Distinct business units can be a key element for any firm, as these units have the flexibility to make daily and high level management decisions at the operational level, which frequently yields better decision making. They can take the forms, such as a corporation, association or business trust.

RELATED TERMS
  1. Accounting Entity

    A clearly defined economics unit that is accounted for separately. ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, ...
  3. Interlocking Shareholdings

    A method of creating a unified business group by exchanging shares. ...
  4. Entity Theory

    The assumption that the economic activities of a business is ...
  5. Segregation

    Segregation is the separation of an individual or group of individuals ...
  6. Amalgamation

    The combination of one or more companies into a new entity. An ...
Related Articles
  1. Professionals

    GIPS: Key Characteristics

    CFA Level 1 - GIPS: Key Characteristics. Learn about the key characteristics of GIPS.
  2. Professionals

    Characteristics and Income Taxation of Business Entities

    Characteristics and Income Taxation of Business Entities
  3. Entrepreneurship

    Is Equity Financing the Right Choice for Your Business?

    Discover the benefits and drawbacks of equity financing for a small business, and learn when equity financing should be used instead of debt financing.
  4. Entrepreneurship

    Which Type of Organization Is Best For Your Business?

    Learn the differences between the types of business organizations so you can determine how to best structure your business for tax and liability limitations.
  5. Term

    How Market Segments Work

    A market segment is a group of people who share similar qualities.
  6. Investing Basics

    What’s The Difference Between Shares And Stocks?

    In today’s markets, the distinction between stocks and shares has become blurred.
  7. Entrepreneurship

    The 4 Most Common Reasons a Small Business Fails

    Discover the most common reasons small businesses fail, including capital formation, management concerns, planning issues and marketing missteps.
  8. Entrepreneurship

    S Corp. Vs. LLC: Which Should I Choose?

    Understand the major distinctions between an S corporation and an LLC, and the important factors to consider when choosing your business structure.
  9. Investing

    How Special Purpose Entities Help Fight Risk

    A special purpose entity, sometimes called a special purpose vehicle, is a legal entity created for one very limited, particular task. Typically, SPEs are subsidiaries of a larger corporation.
  10. Options & Futures

    Asset Protection For The Business Owner

    Could incorporating your business help protect it? Find out here.
RELATED FAQS
  1. What are some examples of how corporations manage short-term investments?

    Learn how a business owner can protect against significant liability by forming a corporate entity structure, and understand ... Read Answer >>
  2. How do segregated funds differ from mutual funds?

    Mutual funds are investment vehicles that many investors have embraced as a simple and relatively inexpensive method for ... Read Answer >>
  3. What types of expenses are factored into autonomous consumption?

    Examine the principles of autonomous consumption in a zero-income scenario and the differences between induced or discretionary ... Read Answer >>
  4. How can a company or entity maintain an absolute advantage?

    Learn how a company or entity is able to maintain a absolute advantage. Understand the difference between absolute advantage ... Read Answer >>
  5. How does discretionary income relate to autonomous consumption?

    Learn what differentiates discretionary income from autonomous consumption, how the two relate to each other and what place ... Read Answer >>
  6. How can a company or entity challenge the absolute advantage of another company?

    Understand what absolute advantage is, and learn how a company or entity can challenge the absolute advantage of another ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center